Network Rail 'fined' over missed punctuality targets

By Edd Gent

Published Monday, July 7, 2014

Network Rail will have to return £53.1m to the Treasury after it "failed to deliver" on major commuter and long-distance route punctuality last year.

NR "fell significantly short" of commitments to deliver average punctuality levels of 92 per cent on long-distance passenger services in 2013/14, the Office of Rail Regulation (ORR) said, achieving a figure of only 86.9 per cent.

This resulted in many thousands more late trains than there should have been, prompting what is effectively a fine under an order made by ORR in 2012. This comes less than a month after the company announced its annual profits had soared to more than £1bn.

On long-distance performance in the five years ending March 2014, the ORR said NR "did not deliver all of its plans to improve performance and, particularly in the early years of the (five-year) funding period, had insufficient knowledge of the condition of its key assets, such as earthworks, electrical equipment and drainage".

The ORR added that on London and South East England (LSE) passenger services in 2013/14, NR achieved punctuality levels of 89.6 per cent against a target figure of 93.0 per cent.

The ORR said: "As a result of missing its funded obligations, and to address issues which have disrupted services for passengers, the company has committed extra funds to improve the resilience of the rail network in LSE. Plans expected to include projects costing at least £25m must be in place by December 2014."

Over the period 2009-14, the ORR concluded that there were approximately 73,100 additional late trains over and above funded obligations, while for LSE there were approximately 265,500 additional late trains over and above funded obligations.

The ORR was, however, pleased with certain aspects of NR's performance over the period 2009-14, saying the company had delivered a major rail enhancement programme largely on time and within budget, bringing real benefits to passengers.

Across 118 projects, 98 were delivered early or on time, with only one delayed in a way which had a notable impact on customers. The company has also electrified railways in North West England to bring more reliable services to the region.

Also, NR had made significant investment in Britain's freight network through projects to improve capacity and reliability of freight services, including schemes to enable the running of longer trains and the introduction of new routes on the East Coast corridor.

The company had also helped to improve safety at level crossings, as more than 800 crossings across Britain have been upgraded or closed.

In addition, working with the rail industry, NR was helping to carry record numbers of passengers and freight on the rail network. There were more than 1.5 billion passenger journeys on the network in 2013-14, up from around 1.2 billion in 2008-09. The amount of freight goods carried has increased from 102.7 million tonnes in 2008/09 to 116.6 million tonnes in 2013/14.

ORR chief executive Richard Price said: "NR committed to improve train punctuality between 2009 and 2014, and was funded to do so. But it did not deliver its commitments for passengers who travel on long-distance and LSE services. NR fell significantly short of punctuality for long-distance services, so it is right that money is returned to funders (the Treasury).”He added: "NR's performance will continue to be under the spotlight. It must now deliver the basics in planning and managing the reliability of key components of the rail network such as bridges and earthworks, and deliver its performance plans to ensure it meets all obligations for customers between 2014 and 2019.

"We accept that we have fallen short of the regulatory targets for train punctuality and that this is, in part, down to our failure to reduce infrastructure faults quickly enough,” said Network Rail chief executive Mark Carne, who joined NR in February.

"The industry is now benefiting from significant funding but there remain challenges following many decades of underinvestment. Getting train reliability back on track is a key priority for us over the next three years in particular and we have good plans to improve the underlying reliability of our assets alongside significant investment to increase capacity and relieve congestion.

“I am confident that by the end of this control period (2019) we will meet and indeed exceed the regulatory performance targets."

Michael Roberts, director general of rail industry body the Rail Delivery Group, said: "The news that Government wants to use the funds returned to the Treasury to pay for improvements, alongside plans to make the network more resilient, are positive signs of how the system can work for passengers.”